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Investing your money is one of the most important requirements in today’s life. But it is not just investing for the sake of it, planned wise decisions is what is the key to a sound financial future. For those who have just started earning and are slowly venturing into the realm of investing their newly hard-earned money, each decision must be wisely taken. Penned below are some thoughts on how people who just got a job and started earning should approach investments financial planning.

1. Pay down your education loan: Before you think about investments or building assets, – you need to think about your liabilities and how you will deal with them. For those who have taken up a student loan, as a first priority, start clearing those off. Pay as much as you can every month to get rid of the loan as quickly as possible. Get into the habit of putting aside some money every month and when the loan eventually gets over, it will be easy enough to put aside the same money as savings financial planning services India

2. Don’t get into credit card debt: The only thing greater than paying down existing debt is to not get into a new one, and especially credit card debt. It is almost always spent on stuff you could live without, and the high interest rate means it adds up pretty quickly. If you are paying an insane amount of interest for the new jeans you just bought, – there won’t be much left for you to invest. Stay away from it.

3. Risk: One must learn that with investment there are both returns and risks. Thinking about risk, when you first start out to invest is very important. Different people have different tolerance for risk, and different products offer different risk levels. A fixed deposit is usually much safer than an investment in an equity fund. How much money can you lose without losing your sleep? This is an important question, and you should keep asking this to yourself financial planning in NCR

4. Invest in tax saving instruments: One generally starts investing by buying stocks and continue doing so for a long period of time. I think it a mistake. Early on, one should invest in mutual funds that are eligible for tax savings instead of buying stocks. After some point in time, – you will reach the upper limit and not be able to save any more tax, but until then invest in stuff that reduces your taxable income and tax liability.

5. Stay away from short term trading: If you are not a professional trader, – stay away from short term trading in the stock market. You will only lose money. If you must trade, then do so with small sums of money that you are comfortable losing.